Costs Go Up as Labor Pool Diminishes

Wilkinson says the modest cost increases are positive signs that the economy is improving.

HOUSTON—Construction costs in Houston are predicted to trend upward, anywhere from 2% to 5%. So says Kirksey’s 2018 annual construction cost update, which provides a comprehensive look at the industry, focusing primarily on office buildings and parking structures, as well as corporate interiors.

Even many months after Hurricane Harvey, its impact continues in examples such as subcontractor shortages in several trades–primarily drywall finishing and interior painting. These impacts will likely continue for another year, as the pace of residential construction recovery is spread out due to delays and complications with insurance settlements and permitting. Overall, permitting durations are no better than last year, and in some cases, worse, with the increase in total permitted projects after Harvey.